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Obama Refuses TARP Payments

by: Robert McIntosh   posted: 2009-04-05 00:26:00
Viewed 1353 times. 4 Comments.

We all kind of knew this was going to happen. A prominent bank wants to give TARP money back and the administration is refusing the payments. Going so far as to threaten the bank if they proceed.

From the WSJ:

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Now why on Earth would the administration refuse to get the money back? Yes, that was a rhetorical question...

The answer of course is control and power. It can be the only explanation. By forcing the banks to keep the money the government can mandate and control the banks.

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Comments 4

Vicki D on 2009-04-05 01:45:57

The bank should not pursue giving the money back to the government but instead, hire lawyers to get out from under the TARP requirements.


Hythloday on 2009-04-05 23:26:18

What the bank ought to do is cash the check and then give it to charity. Let's see the Obama administration spin that.


Jack Walsh on 2009-04-06 21:50:36

Perhaps they could lend it out. Perhaps they could disclose their loan rations.

But, if they really would rather hold on to their bonuses than do the right thing, so be it.

Losers.


Jack Walsh on 2009-04-06 22:26:29

Oops. Ratios.


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